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tv   Worldwide Exchange  CNBC  March 15, 2010 5:00am-6:00am EDT

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and in europe, finance ministers meet with a deal on a greek bailout likely to be signed in brussels. despite german and french reluctance to commit. here in asia, the yuan falls against the dollar. chinese wen jiabao says the country's currency is not undervalued. nice to have you with us here on "worldwide exchange," i'm nicole lapen. it's 5:00 in the morning on wall street. welcome to the start of your global trading day. let's take a look at how markets are likely to open. lower across the board with dow futures hovering around 25 below fair value right now. nasdaq futures and s&p 500 futures are about 3 below fair value at this hour. steve, of course, we are all focused on all of the long coming out of the fed tomorrow. so, trading, we're expected, of course, to try to gain some traction ahead of that. how are you guys doing?
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>> we're doing very well, nicole, thank you very much, indeed. here in europe, it's after 9:00 a.m. in london. european markets have been trading for one hour. this is how they look. they've done rather well over the last couple of weeks. 5% to 6% higher in that period. the london market outperforming certainly over the last couple of weeks. now up year-to-date 3.9%. it must be said, of course, at the same time the pound has gone down and as such there is a factor there, obviously, needs to take into consideration more international investors. let's go out to christine in asia. >> hey, steve. good to have you here with us. of course, in the markets here we're seeing a mixed finish across asia simply because we're on fed watch and bank of jopen watch, as well. they're all meeting this week. the language coming out of the two central bank meetings is going to be fairly important for asian markets. as for the nikkei, pretty much flat. hang seng is down 0.6%, the shanghai market down 1.2%. lots of concerns about policy tightening and that is weighing on sentiment over in shanghai.
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elsewhere the picture is also looking pretty mixed. the currency markets, dollar/yen going to be focused on what the fed's going to be talking about, 19.68. euro weaker against the dollar. sentiment also for the sterling also weeker against the dollar 1.5093 and euro/sterling 0.9090. >> christine, let's get to our first guest. our guest host for the first hour of the show, roger nightingale, strategist at point. and very good to see you today. well, of course, i'm sure watching the language of various politicians and regulators is always pretty tough going. but we will be looking at the language from the fomc this week, the federal reserve, and i suppose questions over what extended period means. should the u.s. even be considering any form of tightening this year? >> it depends whether they think the fourth quarter number, a very good number is a harbinger
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of more good stuff to come. or whether they think that was a bit of a false dawn and that the economy is going to be weaker again in the early part of this year. i would be inclined to go a little bit for the latter view. and i would have thought that they would have wanted to see, if they think the other way, that, in fact, there is evidence of it. i think they would want to see strong first quarter data before they talk about raising interest rates. because they wouldn't want to raise interest rates when the economy was weakening, of its own accord, and causing a significant downwards plunge. i think at the very least, therefore, they'll leave it until summer, autumn, even winter before they do anything. >> when we see evidence of real job creation, perhaps, as well, even though that seems a lagging indicator for economists, it seems to be all-important, certainly, for the administration? >> absolutely. and justifiably so. because, i mean, employment growth is a reflection of the past in the sense that you take on more people when you have
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been growing more quickly. but it is also is a forerunner of the future because the guys who are taken on do extra consumer spending and give the whole thing an extra leg up. and until you get some job creation, you don't have sustainable growth. so, i would think the fed is pretty unlikely, if it's wise, to raise interest rates in the near term. >> roger, nicole lapin in the united states. of course, you are focused in on the all-important jobs number. but of course on friday we had surprisingly strong retail sales numbers, and some suggest that the fed should at least try to soften its zero promise, in case that the economy starts to recover more rapidly than we expect. is that wishful thinking? >> well, i think if it were to recover much more quickly, if there were to be two or three months worth of very strong, shall we say, industrial production, retail sales numbers, even employment numbers, then i think they could
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move more quickly. but i think, and they would welcome those numbers, in a sense they would welcome the interest rate increase that was caused by it, because the economy would be recovering. but, suppose those numbers don't prove sustainable. then to raise interest rates in front of a -- of a weakening, would make them look very silly, indeed. so i think taking everything into account, and not wishing to make mistakes, delay is better than presumptive action. >> roger, this is christine. what's your prognosis of the u.s. economy is a double-dip recession yes or no in terms of an outlook? we have premier wen jiabao warning a global economy could actually go back into a recession. >> i think he's very wise. i think he's right to say. there is this danger. now as it happens, america and china are the two strong units in the world.
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japan and europe, europe in particular, are the weak ones. they are flat as pancakes. and the problem is that neither china nor america can export into japan, europe, because they are so weak. you really need to see the europeans, and the japanese to some degree, picking themselves up before you've got sustainable activity on a worldwide basis. and, my anxiety is not so much this, it is that the bottom of the cycle occurred some time around about beginning of last year. we're a year and a quarter in to recovery. that means we should be experiencing our fastest growth rates at the moment. and we are achieving growth. but, in fact, they're not very fast. they're all right in china. they're okay in america. they're awful everywhere else. and if that's the fastest, if that's the best you've got in this cycle, we should be worried. but the real worry is not actually in the immediate future.
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the real worry is when the economy is due to turn down again autumn next year. and if we don't get fast growth between now and then, crikey it's going to be bad then. >> roger, it seems to be at least your speed well. roger nightingale our guest host, certainly for the next 53 minutes. let's get you some big stories we're following around the world today. a bailout for greece will top the agenda, as euro group finance ministers meet in brussels. policymakers are discussing how they can support greece if it fails to refinance its debts. but they are not expected to give any specific figures. the group has not yet promised financial support to greece. meanwhile, eu economic and monetary affairs commissioner olli rehn told spain's newspaper that the eu's credibility would suffer permanent damage if greece were to fail. and steve, u.s. financial regulation is getting a face-lift of sorts today.
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senate banking committee chairman chris dodd is announcing a bipartisan bill to overhaul the financial regulation system. the plan calls for a consumer protection division that would essentially allow the fed to regulate how banks sell credit cards and mortgages to consumers. the overhaul also hands over more control to the s.e.c., allowing it to regulate the amount of risk financial firms can put on the books. and investors fear the feds easy money policy could be coming to an end. the global benchmark for banks borrowing dollars rose to 3.5-month highs on friday. that customarily signals the increased worries over higher rates. the fed decided last week to remove its extended period commitment to emergency rates. friday's surprisingly strong retail numbers, as we were mentioning in february, also suggest that the fed may need to soften its zero rate policy. quicker than expected recovery can spur, of course, christine, inflation. well, nicole, china strikes back at critics saying the chinese yuan is not undervalued.
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in closing remarks at a national people's congress yesterday, chinese premier wen jiabao said recent external calls for the appreciation of the renminbi were unhelpful without directly mentioning the u.s. win also made clear the that beijing would not bow to external pressure and it alone would decide when to revalue the currency. >> translator: depreciating one's own currency and attempting to pressure others to appreciate for the purpose of increasing exports, in my view, is protectionism. >> win also took the opportunity to air beijing's concerns about washington's fiscal policy, saying china, as the largest creditor of the u.s. debt, was concerned about the lack of stability in the dollar. >> translator: we cannot afford any mistake, no matter how slight when it comes to running our financial assets. here i would like to stress that the u.s. treasury bonds are guaranteed by the national credibility of the united states. i hope that the united states
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will take concrete steps to reassure their investors. >> the ongoing war of words between beijing and washington over the yuan comes just one month before the u.s. treasury department is due to release its semiannual report. there is mounting speculation the obama administration could label china's currency a manipulator in the report on the 15th of april. well, still to come, asian markets have fallen from their seven-week highs as investors wait for key monetary policy meetings this week. we'll analyze in-depth what's moving markets across the globe right after this break in our global stock watch.
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welcome back to "worldwide exchange." this is how the picture is looking for gold, as well as oil. let's take a look at the gold charts and see how the price of gold is trading right now. bouncing back a little bit up $2. 1104. it kind of fell slightly a little bit earlier on expectations after the drop in u.s. consumer confidence on expectations that energy demand in the world's largest oil consumer country is fragile. light crude is down 37 cents, 80.87 a barrel. and well as brent. up 24 cents. 79.63 cents a barrel. steve? >> thank you very much, indeed,
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christine. let's get to our global roundup of equity markets now. we are joined by adam edwards, i should say, joins me on set. anna, what's going on in london? >> the ftse 100 is not going very fast this morning. down by three cents. we're lacking a little bit of corporate news today. we don't have a great deal of that to get our feet into. the handover from the u.s. is fairly flat from friday, as well. bt going a little higher. upgraded by citigroup. bskyb was also upgraded. there was talk in the markets that perhaps newscorp which owns a borgs of bskyb was going to take over a portion of it led us to a rally in the stock. today we see that stock moving a little bit lower in trade. the mining sector, really moving to the downside. as you'd expect from the overall ftse 100 moving lower. bae is in focus down a little bit in the early part of the trading day. the scout armored vehicles
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contract is due to be awarded by the ministry of defense in the uk. they're expected to give that to general dynamics over in the u.s. there have been reports over the weekend that suggested that bae might be about to make a last-ditch attempt to try to get its hands on at least some of that contract. perhaps that will have to do with job creation in this country. shell it looks as if their efforts along with petrochina to get their hands an arrow energy may have been thwarted a little bit. according to various reports in the australian press, the bid of $3 billion u.s. dollars just might not be enough. they say analysts and investors are all saying that this is not going to be enough. a lot of speculation then that the deal could be rejected. let's get to patricia now over in frankfurt. >> thank you very much, indeed, anna. we're actually trading very close to our interday session lows. about 50 million shares have traded so far, down about 0.2%. we had a great couple of weeks over the last two weeks and managed to close in positive territory last week up by 1.1%. we're really waiting for more impacting data, perhaps
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tomorrow, the xetra w. will do its trade. metro gaining quite nicely. well above the other market players. up about 1.4% on the back of an upgrade from jpmorgan to overweight from neutral. fresenius, as well as hengle. and bmw trading up about half a percent. on the downside, for example, steel trader, and thyssenkrupp steel got a little bit under pressure this morning. that's down about 1.4%. thyssenkrupp itself down about 1%. also deutsche bank has been trading down all morning, down about 1%. we do have here a different article talking about dividends policy, dividend payout ratio in the future with a target of about 50% of profits for 2009. it was only about 10% below that of the overall profits. and deutsche telekom suffering a downgrade. that's germany. over to france now.
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hi stephane. >> hi, patricia in in france politics today, after president nicolas sarkozy had a big step back this weekend. he lost the regional elections. his political group came in second after the socialists. the french market is quite limited. the short-term implications particularly are limited and nicolas sarkozy already announced there won't be any major government reshuffle because of the outcome of the election. for the time being the cac is down 0.3%. in terms of corporate news, we've got eads trading a bit higher after some report from the u.s. defense ministry could extend a deadline for the bid to get the contract of its refueling air tankers to give the name for eads to reconsider its position. the stock is trading slightly higher. on the downside we've got axa, the largest insurance company, after the insurance accusation in france revealed that it will
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cost 1.5 billion euros to the insurance company. a bit more than originally expected. and so before the weekend air france was sentenced to pay $1.1 million to the family of the victim of the air france crash 447. axa was the main insurance company for air france and decided to appeal this decision. now over to christine in singapore. >> thank you very much for that stephane. asian stock markets fell from seven-week highs today. a couple of things. currencies between china and the united states, as well as sovereign debt worries keeping investors away from riskier assets. fears of further tightening over in china. that weighed on the shanghai composite today. the index closing down 1.2%. elsewhere, meanwhile in hong kong, the hang seng getting dragged down as a result, losing 0.6%. dragged down by mainland shares. lots of jitters there off of policy tightening. in japan, the nikkei closing flat. managing to add on gains on a weaker yen. of course investors stay on the
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sidelines waiting for the monetary policy reviews from both the bank of japan, as well as the fed. and over in south korea the kospi lost 0.8% with technology financials really losing ground there. down in australia, the resource heavy s&p 200 lost 0.7% on concerns, of course, that possible policy tightening coming from china could reduce demand for resources. we know china and australia linked as far as demand is concerned for commodities. and that's all the market action here in asia. wrapping up your global stock watch. coming up, is manchester united for sale? the football club says no. and the fans say yes. find out more with ross westgate who is live in manchester. ross? >> yeah, steve, absolutely. also find out why these could be forcing to sell up.
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welcome back to "worldwide exchange." it is 5:22 on the east coast of the united states. you are looking at a dreary, dismal day in manhattan right now. the weather is causing all sorts of delays at airports and massive flooding in and around the tristate area. that type of sentiment is also seeming to be trickling over to the markets right now.
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u.s. markets are likely to open down across the board. getting worse in just the last 20 minutes or so. dow futures down about 32 below value, nasdaq futures down about 6 below fair value and s&p 500 futures down about 4 below fair value. in the united states, we're waiting for a couple of pieces of economic data out today. the margins empire state manufacturing numbers out at 8:30 eastern time. the consensus expects a reading of 24, slightly below last month's 24.91 reading. the february industrial production number also comes out at 9:15 eastern. the consensus expects a slight gain following last month's nearly 1% gain. and finally a little bit of insight into the health of housing. the nahb housing index for march is expected out at 1:00 p.m. eastern time and is expected to have a similar rating to last month, holding steady at 17. steve? >> okay. thank you very much. manchester united says no sale. but the fans think otherwise. at yesterday's 3-0 win over
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fulham, half of the 75,000 fans at old traf ford were demand in that they allow the red knight consortium to take over the premiership champions. ross westgate joins us from outside old trafford. why should our viewers carry about newton, heath, railway fc which was formed in the late 19th century? >> and these are the colors, steve. green and gold, or green and yellow. in fact i couldn't get a scarf. they sold out. which shows you how big the dispute has become. why are these people wearing this color rather than the reds -- this is red of manchester united. well, they're worried about the financial status of manchester united? remember the glazer family from florida, they own the tampa bay buccaneers bought this club back in 2005, and immediately loaded it up with an awful lot of debt. and the last set of accounts we had, they had profits of 48 million pounds just over, but
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they paid nearly 42 million pounds in interest. and the fans are worried that there's too much debt on this club. it used to have no debt before the glazers bought it, and so they would like them out. what we heard of the couple months ago was that some high profile manchester united fans, for example chief of goldman sachs had put together a consortium of red knights to see if they could raise money to try to buy the glazers out. now we're in this potential war. we had another report yesterday in the british newspaper the sunday telegraph saying another consortium might be thinking about a bid of 1.2 billion pounds, as well. but the glazers, they might want a price of around 1.6. what we have potentially is a fan revolt at the american owners of this famous sports club, manchester united. being led by hedge fund managers and chief economists from goldman sachs. >> the problem is, ross, the club's doing rather well at the moment in many ways. internationally it's looking good in the champions league. domestically it's looking
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incredibly good form, as well. and the fans are still going to games. the fans are still buying jerseys. and of course the television rights are still going rather well, as well. when you've got a sell here doesn't want to sell, and a buyer who is desperate, this is only going to inflate the potential price, isn't it? can the city investors afford this and won't they be buying a huge bunch of debt? >> the point is the money they put in will pay off the debt. once they've cleared off the debt they try and run it and earn the income that they're earning, which was last account about 48 million pounds. it is a key point. sponsors are still coming on board, steve. last week malaysian telecom signed up. we think that deal is worth 20 million pounds. so another sponsor being announced today. but how -- the key here is going to be how much do the glazers need the money? we hear they may have some problems. maybe they're exposed to subprime in florida in some of the real estate issues. if they need the cash, there will be a price, which they pay. of course we don't know if that is the case. >> you couldn't put the hat on again for us, could you, ross?
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>> yes, go on. >> it's just a classic tv moment. >> there you go. see. the green and gold is important rather than the jangley bells. >> my son's got a red and white one. looks very good, ross. ross westgate in the colors of -- >> i'll do anything for tv. >> i know. we'll test that over the coming years, ross. right. let's ask roger nightingale a question, as well. finances are always bonkers for government finances, aren't they? >> very similar, indeed. lots of borrowings, and it's all right so long as you have a revenue stream to pay it off. i mean, it isn't that manchester united's borrowings are outrageously high, if the club can generate the revenues. and it is generating the revenues. and so probably it's okay. greece is a problem because it's got the debt, and it hasn't got the revenues. japan has got the debt, but it hasn't got the revenues.
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and actually, this actually i think brings back to a more important problem, when you're in that situation, what do you do? do you contract the debt, hoping that that's going to improve the revenue growth? or do you concentrate on improving the revenue growth, hoping that that will pay down the debt? now, the europeans think that the answer is to control the debt. and actually they are prepared to basically stifle the greek economy so as to do that. and they will make things worse as they nearly always make things worse. never let the europeans get anywhere near any financial problem. what they should be doing is reactivating the greek economy. >> we'll leave it there. you take the europeans, and i think the u.s. have got their own financial issues, as well. as have the japanese. but we'll discuss this point in some more detail. thank you, roger. >> yeah, we will, indeed. coming up on "worldwide exchange," we'll discuss strategy in our next half. our next guest thinks there may be too much optimism regarding the prospects for the u.s.
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economy. we'll ask him why coming up.
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welcome to "worldwide exchange." the headlines making news today. out of the united states, investors brace for the senate's proposed overhaul of the financial regulatory system. in europe, finance ministers meet with a deal on a greek bailout likely to be signed in brussels. that despite german and french reluctance to commit. here in asia, the chinese yuan falls against the dollar after chinese premier wen jiabao says the country's currency is not undervalued. great to have you with us here on "worldwide exchange." let's take a look at how markets are likely to open in the united states. lower across the board, and getting more so just in the last half an hour or so. dow futures are down about 30 below fair value at this hour. nasdaq futures also below, 6 below fair value. s&p 500 futures also in the red
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right now. steve, of course, as we are trying to find some traction today ahead of the fed meeting coming out tomorrow, as you guys are, across the pond. >> let's take a look at the european markets, nicole, if we may. pretty flat, really, the xetra dax down zero.2%. ftse now 4%. the dax and the cac are pretty flat but 6.2% higher the dax is over the last two weeks. the cac up by a similar margin. over in switzerland, down 0.2%. christine? >> steve, kospi watching the fed meeting this week. that is going to have implications for the dollars. we also have the boj, the bank of japan meeting as well. lots of people are saying further easing from the bank of japan could see the yen weaken. right now the dollar is a little bit stronger against the yen at 90.68. euro weaker 1.3718. still some concerns about a debt situation over in europe. and sterling also following the euro weaker, 1.5057.
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and euro/sterling 0.9107. nicole? >> and christine, u.s. senate regulation commission is getting a face-lift today. senate banking committee chairman chris dodd is announcing a bipartisan bill to overhaul the financial regulation system. the plan includes a call for a consumer protection division that would essentially allow the fed to regulate how banks sell credit cards and mortgages to consumers. the overhaul also hands over more control to the s.e.c., allowing it to regulate the amount of risk financial firms can put on the books. so let's discuss that more with leo tillman, the author of "financial czar winism" and the president of ln tillman and company. he is with us, and our guest host roger nightingale is also with us, as well. leo, want to bring you in on financial regulation. of course, dodd's reform bill is expected to be unveiled today, after about a year. it's not expected to have financial -- excuse me, bipartisan support. is that okay after all of this
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time? is it better to not have support than nothing at all? >> well, the major concern throughout the financial markets and in washington, d.c. has been the fact that we're letting a good crisis go to waste. and this proposal is long overdue. it would be difficult to get it done, probably, without a bipartisan support. more of the same. risk controls on financial firms, consumer protection. one of the themes that is not getting a lot of traction, and should in my mind, is the role of transparency. the latest news on lehman brothers, and a lot of the previous headlines underscore the need for financial markets to see what's going on inside of financial firms. i'm not sure it's going to be part of this regulatory proposal. >> roger, i want to bring you in to this. talk to leo, then. how can we get more transparency in the system? >> with great difficulty. regulators have an enormous
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amount of difficulty in seeing what's going on in organizations. the organizations, if they wish to hide what's going on, find it very easy. it's -- it wouldn't be a problem if the executives wanted to show the regulators what they were doing. but by and large, they don't. and the regulators, i don't think, either have the powers or generally speaking the intelligence to understand what's going on. so i think, in fact, we almost have to give up on transparency, i'm afraid. all you can do is wait until a problem occurs, and then afterwards, go in, see what happened, and punish the guys who committed the problems. now what regulators always want to do, what, in fact, we the public want to do, is prevent the problem before it occurs. impossible. i say. >> it's a very gloomy outlook. it's probably very pragmatic one, but a gloomy one. >> yes. >> i think we're putting way too much emphasis on regulators.
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it's very difficult for them to distinguish what's going on between different kinds of firms and discover these problems before it's too late. without empowering capital markets. it's just unrealistic to expect that these problems will be discovered before too late. so, certainly not a part of this regulatory proposal, but should be. >> where's the emphasis on the financial regulation, leo? it seems to me that we're getting way laid again. people are looking at consumer side of things when what we need to do is enforce the powers that roger says aren't in place for the regulators. do we need actually for the companies, the financial institutions, to pay more so that we do get better regulators and regulators who ask the right questions? because at the moment, they do seem underpowered? >> i'm not sure whether -- >> absolutely, well asking the right questions is absolute key. not just by the regulators, but everybody.
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executives, boards of directors, et cetera. i would distinguish consumer protection in this, because there are reasons to believe that consumers were not properly informed about the risk of loans that they were taking and credit cards and investments. so i think it's tremendously worthwhile to educate consumers on these kinds of products, whether it's a separate agency, or it's existing regulators is less important in this regard. but the transparency of financial institutions is something that is missing almost completely. and you can include it as part of the regulatory reform. because it's not that difficult for financial institutions to inform the markets about the kinds of risks that they take, and where their earnings are coming from. but the focus seems to be shifted elsewhere. >> my anxiety is that we have a fairly expensive regulatory system at the moment. which is ineffective. and i don't want to make it even
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more expensive and ineffective. >> a ton will go to the risk management desk of the financial institutions. if you are a bright guy coming out of m.i.t., who is going to be able to pay your wages better? the finance institutions or the regulators. the former, isn't it? >> it is indeed. and you've got to recognize that. it's like saying, just the criminal have to be paid -- or sorry does the policeman have to be paid more than the criminal? not necessarily. the criminal is always, when he's successful, going to get paid more than the policeman. the policeman, though, has to come after the event, when the crime has been committed, and put the criminal in prison. >> right. >> don't try and do it before the event. it's too expensive and can't be done. >> i would just say to you on that note the financial institutions aren't criminal, despite what some people may think. >> no, no, but some of their activities are. we define what criminality is and some of them are. you cannot catch them before they commit the crime. >> i think there are questions
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over regulation rather than illegality. but we have to move on for the moment. roger, thank you very much, indeed, for the moment. and leo, as well, author of "financial darwinism" and the president of l.m. tillman and company. we'll get strategy ideas from you both in a short while. >> also so much more to come. is that in for google in chain sna? we'll take a look at the increasing certainty that the search engine will shut up shop. here's a quick look at how oil is trading.
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welcome to cnbc's "worldwide exchange." here are some of the top stories we're watching for you from around the world. google is packing its bags and about to leave china. the search engine giant says they are 99% certain they will close chinese search engine operations. talks over censorship has had both sides drawing lines in the sand. china came out on friday with a direct challenge saying they would not compromise censorship on the internet. google is reportedly already drawing up an exit strategy from china. google is now trading basically flat right now. insurance giant aig says it will hold back $21 million in bonus payments. but not everyone is going home empty handed.
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aig will pay out $46 million to current and former employees of its financial products unit. the division of the company is routinely blamed for aig's fiscal issues. former employees were promised bonuses months prior to the credit crisis. following the company's bankruptcy the bonuses were withheld due to, of course, public outcry. aig is now trading slightly lower. steve? >> thanks, nicole. a bailout for greece will top the agenda as euro group finance ministers meet in brussels. policymakers are discussing how they can support greece if it fails to refinance its debt. but they are not expected to give any specific figures. the group has not yet promised financial support to greece. meanwhile, eu economic and monetary affairs commissioner olli rehn told spain's el pays newspaper that the eu's credibility would suffer permanent damage if greece were to fail. christine? >> well, steve, china strikes back at critics saying the yuan
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is not undervalued. china's premier wen jiabao said recent external calls for the appreciation of the renminbi were unhelpful. without directly mentioning the u.s., wen also made clear that beijing was not bound to external pressure. and it alone would decide when to revalue the currency. >> translator: depreciating one's own currency and attempting to pressure others to appreciate for the purpose of increasing exports, in my view, is protectionism. >> wen also took the opportunity to air beijing's concerns about washington's fiscal policy, saying china, as the largest creditor of u.s. debt, was concerned about the lack of stability in the dollar. let's cross live to tokyo now and check in on the trading day there with makiko. >> hello, christine. the nikkei 225 seesawed in a narrow range throughout the day and ended unchanged.
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optimism towards additional monetary easing and further weakening of the yen held up the market. exporters were steady and canon jumped nearly 3% to reach an 18-month high. the nikkei has reported that the chinese government plans to spend heavily on ultrahigh voltage power transmission networks during the next decade, and related stocks such as fuji electric rose nearly 9%. but overall trading volume was low, as some investors prefer to stay on the sidelines ahead of the bank of japan's two-day meeting starting tomorrow. at a press conference today, japanese senior vice finance minister kept pressure on the boj calling for it to take appropriate and flexible action to support the nation's economy. some market watchers say that if the boj takes no action, the yen could jump and hurt exporter shares. that's all from nikkei business report. back to you, christine. >> thank you very much for that mackicco utsuda there the nikkei.
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>> time for the final thought from roger nightingale, strategist for pointon york. we talked a lot about finances, whether they be government debt, but generally corporations seem to be doing rather a good job of getting their finances back on track. that's being reflected in the appreciation of these efforts by the markets. can this disconnect between corporations, either the value we're seeing in the market, continue with the government backdrop looking so dreadful? >> i think, in fact, it's the other way around. corporate situation is looking good, corporate finances are looking good because the public sector ones are so bad. the government is throwing the money out, and of course it's falling into the hands of some good guys and some bad guys. and actually, the corporations are doing very well out of this at the moment. and so long as the governments carry on doing what they're doing, i think the corporations will do very well. and the stock markets very well. >> roger this is a fullty year phenomenon. the problems government debt is showing, can the markets rally
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on time? >> i think they can. my anxiety is the government changing their starts. the sort of things we're talking about. when they do change, we'll get a change in attitude in the stock markets as well. >> we talk about good guys and bad guys. roger definitely good guy. roger nightingale, strategist at pointon york. now, european viewers and asian viewers have another action packed hour of "worldwide exchange" ahead of them. u.s. "squawk box" starts in 12 minutes for viewers stateside. becky quick can tell us what we can expect. good to see you. >> good to see you, too, steve. another one of the good guys, you yourself. we have a big week coming unfor the markets, including a fed meeting and big economic reports. visiting us in the studio today our guest host congressman ed towns. the chairman of the house oversight committee. also we'll be joined by republican congressman eric canter. he's the third in charge of the republicans in the house. he is the minority whip. we'll talk to both of them about health care reform and the toyota fiasco. many things we're going to be
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discussing today. also the financial regulatory reform bill is also front and center today. senator chris dodd is expected to unveil that plan. so what will it mean for the financial stocks? we've got influential banking analyst dick boveaux with his picks. we'll also talk with rob morgan from the financial services accounting board to find out what his industry is thinking about all this. some people say if the big banks like this, it can't be all that tough of regulatory reform. we'll will find out more today. all that plus squawk icon mohammed el-erian. he'll be giving us his opinion on another round of economic data and the fed meeting this week. we'll talk about the tough words coming from china, as well. "squawk box" is coming up at the top of the hour. steve, i'll send it back over to you. >> thank you very much, indeed. thank you very much for the compliment. just gone bright red. >> well, i was trying to make you blush. >> good people all around us.
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stay with us. still much more to come. what's likely to move u.s. markets today. financial regulation reform bill as becky was just mentioning is due to be presented by the senate banking committee chairman chris dodd. how investors will react to the measures?
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today in the united states, we're watching for the march empire state manufacturing number out at 8:30 eastern time. the consensus expects a reading of 24.0, slightly below last month's 24.91 reading. the february industrial production number also comes out at 9:15 eastern time. the consensus really expects a slight gain following last month's nearly 1% gain. finally we also get a little bit of insight into the health of housing. the nahb housing index for march is expected at 1:00 p.m. eastern. and is expected to have a similar reading to last month, holding steady at 17. but let's bring back in leo tillman the author of "financial darwinism" and also the resident of tillman and company.
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leo, want to get your thoughts on some of the economic data we're expecting, outlined it just a second ago. cpi, ppi, housing expected today. we just saw retail get a nice, healthy surge of 0.3%. does that get thrown into the face of skeptics that thought that consumers are just not going to rebound? >> i'm not sure if this upcoming data is going to fundamentally change the outlook on the economy. near-term, probably we'll see more of the same. manufacturing is showing some signs of life. housing is stabilizing, et cetera, but let's not forget that all of this is happening with interest rates at zero. and the government still lating the economy with unsustainable budget deficits. so near-term, more of the same. but potentially bigger problems on the horizon. >> let's talk about that near-term and then let's talk about the slightly longer near-term, six months out from now. there's a lot of money waiting
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out there on the sidelines. what do you think is going to happen with that? it's going to be placed back into the marketplace. >> well, money remaining on the sidelines, and again continually accommodative monetary policy and fiscal policy all should contribute to the same kinds of trends that we've seen over the past few months. slightly higher equities, higher interest rates, credits tightening, things of that kind. volatility should continue to remain high. so all of this is short-term to medium term. but let's not forget that, again, budget deficits are unsustainable. municipal finance is in huge trouble. and it's very difficult to imagine that this deleveraging of the consumers is not going to continue for years to come. so when you put it all together, it's very difficult to see how this kind of pride to perfection financial markets are going to sustain themselves going forward. >> leo, may i pick you up on
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something, you say volatility is to remain high. you said it in your notes and you just said it again there. but volatility isn't high. we have indicators on equity markets that extremely low volatilities compared to the last two years. on government products, as well, they are touching the bottom of recent ranges. is there a massive opportunity here for investors to actually pick up extremely cheap premiums and take advantage of this high volatility environment that you mention? >> well, let's not compare the volatility to the past two years, where we thought the world would come to an end. by historical standards, volatility remains fairly substantial. and again, it's difficult to manage that volatility is going to skyrocket in the absence of major kinds of crises. so until this accommodation remains in place, and problems like greece and dubai are going to be dealt with, volatility is not going to skyrocket from
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here. i think more than plain volatility through typical kinds of strategies, we need to be prepared for the major shift in investors. >> i'm afraid we've got to leave it there. we've got quadruple witching on friday for a lot of viewers. leo 'tilman, author of financial darwinism and president of l.m.tilman and company. we've got coming up, time to say good-bye to our u.s. viewers, but everyone else, coming up, "worldwide exchange." we're waiting eurozone fourth quarter employment data.
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good morning, washington to wall street. changing the rules of the investment game. after months of bipartisan talks, democratic senator chris dodd is ready to go it alone today. unveiling a financial regulatory reform bill.
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the fed matters. the central bank will get sweeping new powers under dodd's legislation. meantime chairman bernanke holding court with the fomc this week. a decision on interest rates is expected tomorrow. the markets at this hour, the s&p 500 climbing back to its mid-january levels. but watch out for a key technical level that we've been talking about, the number is 1150. the bulls and bears play tug-of-war. as "squawk box" begins right now. good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen. carl is out sick today. we hope he's feeling better very quickly. there was a fierce and destructive nor'easter ripping through the states over this past weekend. it was new jersey, new york,


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